Experimental Research On Emotion Of Individual Investors During Decision Making

The neoclassical economic theory now has been facing more and more challenges because of its failure to explain the anomalies in stock market whereas the Psychology, a subject who studies the mind and behavior of human being, can explain these anomalies convincingly through its study of Judgment and Decision Making. In 2002, The Nobel Prize of Economics was awarded to Daniel Kahneman, an American Psychologist, which means the Behavior Finance has been accepted by the mainstream of economics.The aim of this study is to explore the individual investor's decision making behavior, the anticipatory emotion and the influence of anticipatory emotion on decision making behavior.The experiment we have done was a simulation experiment. In the experiment, the subjects should response to every stock price which was manipulated by the experimenter. The stock price is the independent variable of this experiment, the dependent variables of this experiment are: (a)subjects' reaction time of every price; (b)subjects' behavior of buying, selling and maintaining; (c)subjects' heart rate during the experiment; (d)the anticipatory emotion elicited by the price and(e)the final score the subjects get by buying, selling or maintaining a special stock whose price was always jumping or falling.